Why Access to Credit Is Difficult for the Unemployed

Credit institutions are legally required to lend only to solvent borrowers. This means that, in the event of non-payment, the bank must be able to seize part of the income in order to recover the sums due. The entire logic of credit analysis is therefore based on the seizable nature of the income you receive. Unemployment benefits are, by their very nature, protected income. As a result, they are often not or only partially seizable below certain thresholds. This legal protection, which is positive for the unemployed person in daily life, paradoxically makes access to credit more difficult in principle. A lender will be reluctant to grant a loan if it cannot seize any part of the benefit in the event of default. Nevertheless, many unemployed people submit a credit application after a recent job loss. Others have a comfortable wealth (real estate, savings, securities) acquired during their professional life. In these specific situations, a tailor-made analysis of the file and the guarantees offered may open the way to possible financing in 2026.

The law provides for a progressive system for the seizure of income such as salaries and certain social benefits. For incomes resulting from activities other than an employment or apprenticeship contract – for example unemployment benefits, sickness benefits or pensions – specific thresholds apply. Below these thresholds, the creditor cannot seize your benefit, which limits your access to credit. Above certain amounts, part of the benefit becomes seizable, which may facilitate the granting of a loan, subject to the other criteria (charges, other debts, guarantees).

Indicative example of seizable income brackets (net monthly income):

Therefore, unemployment benefits become fully seizable beyond a monthly amount of approximately € 1,386.

Concretely, below this amount, the creditor cannot seize your unemployment benefit in case of default, which considerably reduces your chances of having your credit application accepted. The more your income goes above the threshold and the more seizable it becomes, the more a credit institution may consider your application, always within reasonable limits.

Unemployed but with Assets: Which Guarantees to Offer?

It is common for a person to find themselves unemployed after many years of work, during which they have accumulated a comfortable wealth: a home, a car, savings or a securities account. Even without a current job, this person may wish to submit a credit application to finance a project, consolidate debts or obtain additional liquidity. In such a situation, the credit intermediary (broker) will carefully examine the overall financial situation, not only the unemployment benefit. The objective is to identify to what extent solid guarantees can be put in place to secure the loan: real estate, savings pledged, term accounts, etc. Most of the time, this will involve registering a conventional mortgage on real estate that the unemployed person owns outright and free of any prior charges. This type of guarantee offers the lender a real security in the event of non-payment, which can allow access to a mortgage loan under certain conditions. Note that a mortgage loan generally only makes sense beyond a certain amount (often from € 25,000), due to the notary and registration fees it generates. For smaller needs, other solutions may be considered, provided that your financial profile and level of risk allow it.

Frequently Asked Questions About Loans While Unemployed